. Enefaa Abstract This paper investigates the relationships subsisting between the operations of discount houses and the performance indices of the money market and the general economy. Towards the end, I shall address, as just mentioned by Governor Liebscher, the role of central banks in prudential supervision. The method used involved the estimation of regression models and subsequent analysis of results using conventional statistics. The contribution of prudential supervision to economic growth proceeds along two dimensions.
Government Securities market Financial system enables the state and central governments to raise both short-term and long-term funds through the issue of bills and bonds which carry attractive rates of interest along with tax concessions. Nature and Constituents: The capital market consists of number of individuals and institutions including the Security markets also play a crucial role in economic growth and financial stability. Therefore, the study is aimed at: 1. Even those countries with small and less developed capital market like Swaziland and Uganda did not manage to realize average per capita growth rates above 2. Any shortcomings or fault may arise as our unintentional mistakes.
They do so by converting financial assets into productive physical assets. To know the problems and prospects of Nigerian capital market. It is a market whereby existing instrument already outstanding are transferred. Nature cannot furnish goods and materials to man unless he has the tools and machinery for mining, farming, foresting, Ashing, etc. Banks, on the other hand, may be reluctant to provide loans owing to the risk profile of these firms, and the greater exposure to a negative result in a loan contract. On April 29, the Initiative on Business and Public Policy at Brookings explored the economic role of capital markets. Nowadays, the lack of a well-developed stock market would be a particularly serious disadvantage for any economy.
Through assets with attractive yields, liquidity and risk characteristics, it encourages saving in financial form. For instance, Robert Lucas asserted in 1988 that economists badly over-stress the role of financial factors in economic growth. The technology innovation in United States made them the biggest economy in the world. This ensures a balanced development throughout the country and this will mitigate political or any other kind of disturbances in the country. Fixed capital is used for investment in fixed assets, like plant and machinery. Lets look at some of the importance of capital market in economy.
The contribution of financial markets in this area is a necessity for maintaining the competitiveness of an economy today given the strongly increased international competition, rapid technological progress and the increased role of innovation for growth performance. And will cover the period 1985- 2011. The continued integration and deepening of financial markets is a significant issue for policy-makers, and particularly for central bankers, since smoothly functioning and efficient financial markets are crucial in ensuring a smooth transmission of monetary impulses. Stock exchange is closely linked with company finance and public finance under capitalism. They receives payments or commission for their services. The authors attempt to show readers that incentives are the cornerstone of our society and sometimes those incentives are so great that people will cheat to get them.
If the investment equals the current savings for all units in an economy, then there would be no need for any economic unit to obtain funds externally from financial markets. Despite these important functions, capital markets are often poorly understood. This means that in all those countries, there will be common economic policies, such as common investment, trade, commerce, commercial law, employment legislation, old age pension, transport co-ordination, etc. Economic Growth Capital market facilitates the growth of the industrial sector as well as other sectors of the economy. Much economic development is not possible without the making and using of machinery, construction of irrigation works, the production of agricultural tools and implements, building of dams, bridges and factories, roads, railways, airports, ships and harbors which are all capital. However, securities markets are not always sufficiently liquid and some, especially small and medium, enterprises cannot cover their liquidity needs via securities markets owing to significant fixed costs of access.
The role of supervision is also crucial after the emergence of a crisis, in order to provide for a swift and ordered resolution. It is a conduit through which surplus units lend their surplus funds to deficit units. This suggests that there is neither theoretical nor empirical consensus on the impact of capital market on economic development. Therefore, to arrest the menace of the current economic downturn, effort must be geared towards effective resources mobilization. In fact, the capital market provides a market mechanism for those who have savings and to those who need funds for productive investments. The unorganised sector mainly includes the indigenous bankers and moneylenders while the organised sectors consist of banking system, stock market and term lending institutions.
The short-term or are raised or borrowed in the money market through the issue of different securities such as bills, promissory notes, etc. In consequence, the public authorities must notice the importance of the capital market in the national economy and, on the other hand, to make the efforts for insuring the necessary framework for the normal functioning of its specific mechanisms. Due to its varied roles, this research work will attempt to briefly give an overview and history of Nigerian capital market and discuss the role of Nigerian capital market in economic development which is the concern of this study. The scantiness of long-term capital has posed the greatest threat to economic development in most African countries including Nigeria. The specified shares are more attractive than non-specified shares. A part of the capital must be devoted to the supply of this need.
This helped England enjoy comparatively greater economic success. It is, therefore, possible to increase its supply when the situation requires. The economic growth, investing habits and life style have provided greater opportunities to Indian capital market. The amount outstanding of long-term debt securities issued by the private sector was 22% higher at the end of 2000 compared with the end of 1998. H 0: Capital market does not have significant long-run relationship with economic growth in Nigeria. Thus, financial system enables the creation of venture capital. The valences of the capital could be even more interesting in the case of emerging markets - like the Romanian capital market - being well-known its contribution in reorienting financial resources to efficient activities, contributing to the economic reform, but also being interesting in the privatisation process.